Property damage plus a family’s benzene exposure from a home furnace oil explosion equaled a $945,000+ settlement for an insurer in Nebiol v. Erie Insurance Exchange, C.P. Bucks No. 2014-00766.

On February 7, 2013, unburned furnace heating oil exploded in an insured’s home, which contaminated the home and personal items with odor and excessive benzene levels. The insurer initially determined the loss was covered and agreed to pay for the insured’s hotel and remediation costs. After extensive remediation over the course of a year, benzene levels were still excessively high, which prevented the insured from selling the home. At a certain point, the insurer stopped paying its insured’s hotel fees, claiming that at that point the insured voluntarily chose to stay out of the home.

The insured sued claiming breach of contract, negligence, battery (for the benzene exposure), intentional infliction of emotional distress, and bad faith for failing to settle their claim. A settlement was eventually reached whereby the insurer agreed to purchase the home, transfer taxes (totaling $945,000) and cover the hotel expenses until the sale of the home occured (totaling $4,000 per month). Further, the settlement agreement allowed the insured to bring future claims against the insurer relating to benzene-related illnesses they may contract.

This settlement demonstrates the potential for inflated value of claims where extensive property damage is combined with bodily injury, or in this case, the potential for future bodily injury.

Thanks to Rachel Freedman for her contribution to this post.